MILLIONS of pounds' worth of “dirty money” from the Russian mafia will flow into London and other European cities from tomorrow after Latvia becomes the 18th state to adopt the euro as its currency, a top academic and Ukip leader Nigel Farage are warning.

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I imagine we're going to see an actual spike in dubious money flowing in

Prof Mark Galeotti

They engage in relatively little lending to residents or businesses and in that sense they are similar to many Swiss banks.

In such circumstances, a tough banking regulator is needed but Prof Galeotti believes Latvia’s authorities have yet to distinguish themselves in that field.

He says they “lack teeth”.

He said: “Immediately after Latvia joins the eurozone (tomorrow), I imagine we're going to see an actual spike in dubious money flowing in.

“If you have money you want to discreetly move out of the former Soviet Union, Latvia has a lot of advantages."

Latvia's regulator says it has introduced a number of controls aimed at anti-money laundering, counter-terrorist financing, and preventing excessively large sums from entering the banking system.

But Mr Farage told Express Online: “There are many member states of the EU whose standards are frankly below what we should be dealing with.

“Latvia is one of them and we should not be in this political union with them.

“So much of eastern Europe has links to the former Soviet Union where there is a real problem with organised crime.

"The issue with Latvia is that you have a pretty permissible political environment, and you have the massive and quite efficient infrastructure for managing these funds from the East.

“The question is, why wouldn't you want to go to Latvia?

“The regulators don't have teeth.”

He said they maintain "a kind of culture that emerged in Latvia in the late 1990s...which was ultimately 'Latvia desperately needs business,' and therefore the role of the regulator is not to impede business."